May 20, 2019 / 8:01 AM / a month ago

METALS-Copper extends losses in volatile trade amid trade war fears

(Updates prices)

By Enrico Dela Cruz

MANILA, May 20 (Reuters) - Prices of copper and other industrial metals fell on Monday as investors remained wary about heightened trade tensions between the United States and China, with a strong dollar adding pressure.

Beijing has called on Washington to show “sincerity” if it is to hold meaningful trade talks, after the United States put China’s Huawei Technologies Co Ltd, the world’s biggest telecoms equipment maker, on a trade blacklist.

“There’s a lot of headwinds and it’s difficult to predict what will happen next” in the trade dispute, said Helen Lau, metals and mining analyst at Argonaut Securities in Hong Kong.

The dispute has fuelled fears of a further global economic slowdown and weak demand for industrial metals.

The stronger U.S. currency, which makes dollar-denominated metals more expensive for buyers paying in other currencies, also weighed on sentiment.

Benchmark three-month copper on the London Metal Exchange was down 0.3% at $6,040 a tonne as of 0716 GMT, after a modest rebound earlier in the session from last week’s slump.

The most-traded copper contract on the Shanghai Futures Exchange edged down 0.5% to 47,620 yuan ($6,891.86) a tonne.

FUNDAMENTALS

* SHANGHAI PRICES: Aluminium fell 0.5%, zinc shed 2%, nickel lost 0.8%, lead slipped 0.9%, and tin eased 0.1%.

* ZINC: Rising zinc stocks at LME warehouses and expectations of increased output by Chinese smelters have pulled down prices of the metal.

* DOLLAR: The dollar index against a basket of currencies was a shade higher at 98.024, having booked its biggest weekly rise since early March last week.

* TRADE: U.S. President Donald Trump said his tariffs on Chinese goods are causing companies to move production out of China to Vietnam and other countries in Asia, and added that any agreement with China cannot be a “50-50” deal.

* SCRAPS: China’s scrap metal importers expect disruptions in shipments to start this month because of uncertainty surrounding new scrap restrictions starting in July, depriving the world’s biggest copper consumer of a crucial source of the metal.

* TARIFFS: The United States struck deals on Friday to lift tariffs on steel and aluminium imports from Canada and Mexico, the three governments said, removing a major obstacle to legislative approval of a new North American trade pact.

* For the top stories in metals and other news, click or

PRICES

Three month LME copper

Most active ShFE copper

Three month LME aluminium

Most active ShFE aluminium

Three month LME zinc

Most active ShFE zinc

Three month LME lead

Most active ShFE lead

Three month LME nickel

Most active ShFE nickel

Three month LME tin

Most active ShFE tin

ARBS

($1 = 6.9096 Chinese yuan)

Reporting by Enrico dela Cruz; Editing by Shreejay Sinha and Sherry Jacob-Phillips

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